The desire to thrive across the globe has become a necessity for many, including European businesses, owing to how being confined to a particular location would do little when it comes to making a more significant profit.
While expansion opens businesses to more opportunities and the best talents across the globe, the setup process is not a piece of cake.
When it comes to breaking out in the global business scene, a lot is to be considered, as each country has its regulations. So, for whichever country you decide to expand as a European business, it is pertinent to get conversant with its business regulations.
The following are some of the regulatory issues to bear in mind during global expansion.
A business considering global expansion should understand that the tax system and laws of each country differ. For example, the standard VAT rate in Austria and Ireland is 20% and 23%, respectively, even though they are both European countries; then how much more countries outside of Europe.
Therefore, to tackle the differences, it is essential to get a local office, to be preferably spearheaded by local professionals that are familiar with the local business guides and practices.
We all know that currency differs, and the same could be said with the exchange rate, which is top on the list of global expansion challenges. It can expose your business to a high degree of risk during exchange rate fluctuations. It could even lead you to sell products at a loss, adversely affecting your business.
To prepare for the ups and downs of the exchange rate, you should do your due diligence before setting up in your target country. Consider the exchange rate of your target country against the European currency. If there is a profitable balance between the two, you can go ahead with the expansion, but if otherwise, you might want to have a rethink.
Labour or Employment Laws
Just as countries’ tax laws differ, so are their labor laws. As a European business, there is a likelihood of meeting a shift in the labor law of your target country during expansion.
Take, for instance; all workers are entitled to 20days of annual paid leave in Europe while it is an average of 10 days in the US. Therefore, it is vital to get familiar with the local labor laws; you don’t want to mistreat your new employees.
The influence of local managers can not be overemphasized when it comes to playing your cards right. You will need their help to navigate the inherent curves during expansion
Expanding your business across borders might require physical space at some point in time for direct contact with the consumers. The obligation and right of ownership differ accordingly. For that reason, you need to keep your ears to the ground before going ahead with your expansion plan.
To do that, you should consider taking local advice on the possible pros and cons of ownership.
Registration of Intellectual property
Although European law could protect your home-based business’s intellectual property, the moment you expand to locations outside Europe, you will need to register under the market of your target country, as European law isn’t applicable outside its territory.
Expansion translates to penetrating a different market from the one you are familiar with. There is nothing as important as studying the market and knowing how to ideally and conveniently infiltrate it.
For your business to thrive, stick to the standard business guides of the new country. That way, you won’t only expand your business successfully, but you will also localize your infiltration strategy.
The fact is that globally expanding your business will encounter various challenges but if gotten right, rest assured that your business will survive.
However, that won’t be possible if you don’t look into the potential problems you might encounter and find solutions to them.
Although the issues discussed above are not the only factors to consider, they are excellent ways to start your expansion process, as they are sure-fire ways to get it right. Therefore, work with it and watch your business thrive in the global space.